Archives: EPCRS

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Did Your Company Fail to Adopt a New Preapproved Defined Contribution Plan by the April 30th Deadline? The IRS Has a Solution for You

Background Sponsors of preapproved defined contribution retirement plans were generally required to sign new plan documents on or before April 30, 2016 that incorporated changes required by the Pension Protection Act of 2006 (PPA). Defined contribution plans include profit sharing plans, 401(k) plans, and money purchase pension plans.  Preapproved plans are plan documents that have … Continue Reading

DEATH AND TAXES FOR QUALIFIED PLANS

An IRS plan audit uniquely focuses an employer’s mind on the core identity of its qualified retirement plan, which is that of a tax exempt organization, but one whose exemption (or “qualification”) requirements are far pickier than those applicable to one’s favorite charity. Any single material operational violation or non-conforming written plan provision risks disqualification … Continue Reading

Trying to Sort Through Retirement Plan Operational Issues? February 1: IRS Offers Discounts on Some Fees for Employer’s Voluntary Compliance Submissions

Here are some of the types of issues that cross my desk and upon which I advise: • An HR manager allowed a 10 percent employer contribution into the 401(k) using inaccurate Box 1 W-2 amounts; • Another HR manager failed to automatically enroll new employees who were part of a recent company acquisition; • … Continue Reading

THE RETROACTIVE AMENDMENT FIX FOR PLAN OPERATIONAL FAILURES

Frequently a plan sponsor’s operational failure to follow the terms of its 401(k) or other qualified plan can be corrected under the IRS’s Employee Plans Compliance Resolution System (“EPCRS”) (described at http://www.irs.gov/Retirement-Plans/EPCRS-Overview) with a retroactive amendment instead of a sometimes expensive financial correction. This possibility should not be surprising, given that the maintenance of qualified … Continue Reading

Employers Take Note! IRS Improves Certain Retirement Plan Correction Procedures

The Internal Revenue Service encourages employers and other retirement plan sponsors to voluntarily and timely correct plan failures to help ensure the plans’ ongoing tax-qualified status (and tax-favored treatment). However, in some cases, the IRS’ Employee Plans Compliance Resolution System (“EPCRS” – most recently restated in Revenue Procedure 2013-12) correction method for minor errors results … Continue Reading
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